Petition — Griffin v. United States
Supreme Court brief1976
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SUPREME COURT OF THE UNITED STATES
_OcToBEeR TERM, 19
No. 76-2 '"%
R. L. GrirFIn, MAurRIceE LAMPE, and
ELBERT GRIFFIN,
Petitioners,
VERSUS
UNITED STATES OF AMERICA,
Respondent.
PETITION FOR WRIT OF CERTIORARI TO THE
TEMPORARY EMERGENCY COURT OF APPEALS
OF THE UNITED STATES
CHARLES NESBITT
620 Cravens Building
Oklahoma City, Oklahoma 73102
Counsel for Petitioners
July, 1976
UTTERBACK TYPESETTING Co.. S19 W. CALIF... OKLAHOMA CiTY. PH. 235-0030
TABLE OF CONTENTS
PAGE
Petition for Writ of Certiorari a Lape SS Ser P LoS 1
Opinions Below AE tea irae 1
Jurisdiction [ieee enna ceeeceaieiae ek ie erie eens 2
Questions Presented for Review _ .. eee 2
Pertinent Constitutional and Statutory Provisions __ 3
Statement of the Case aie Nae wears me aE 3
Reasons for Allowing the Writ... -... 9
Conclusion __. eee IS CBT
Certificate follows Appendix.
APPENDICES
Appendix I:
Opinion of the Temporary Emergency Court of
Appeals (unreported) —..........._........... i-xix
Appendix II:
Opinion of United States District Court for the
Eastern District of Oklahoma (unreported), dated
Feb. 10, 1976 Se ee ee XX-XXxiii
Appendix III:
Pertinent Constitutional and Statutory Provisions .xxxiv
TABLE OF AUTHORITIES
CASES: PAGE
Block v. Hirsh, 236 U.S. 135, 41 S.Ct. 458, 65 L.Ed.
—
865 . . nee y
Cities Service Co. v. F.E.A. (TECA 1975), 529 F.2d
aa a
Condor Operating Co. v. », Sawhill (TECA _— 514
F.2d 351 . ees ; ac tae 10
F.P.C. v. Hope Natural Gas Co., 320 U.S. 591, 63
S.Ct. 281, 88 L.Ed. 333. ze: 0) Se oe fe)
F.P.C. v. Texaco, Inc., U.S. _ , 94 S.Ct. 2315 .. 13
Goldblatt v. Town of Hempstead, 369 U.S. 590, 82
S.Ct. 987, 8 L.Ed.2d 130 A LEAT dn Be #8
Munn vy. Illinois, 94 U.S. 113, 24 L.Ed. 77
Nebbia v. New York, 291 U.S. 502, 54 S.Ct. 505,
78 L.Ed. 940 “a ae )
Pasco, Inc. v. F.E.A. (TECA 1975), 525 F.2d 1391 _ 13
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 43
S.Ct. 158, 67 L.Ed. 322 - eee re)
Permian Basin Area Rate Case, int re, ., 390 U. S. 747,
88 S.Ct. 1344, 20 L.Ed.2d 312 OO
Regional Reorganization Act Cases, 419 U.S. 102,
fi & © 3% | > Se =)
U. S. v. Central Eureka Mining Co., 357 U.S. 155,
78 S.Ct. 1097, 2 L.Ed.2d 1228 . = i)
U. S. v. Dickinson, 331 U.S. 745, 67 S.Ct. 1382, 91
L.Ed. 1789 SPR EOE 11
U. S. v. Dow, 357 U.S. 17, 78 S.Ct. 1039, 2 LEd. 1109 11
U. S. v. Peewee Coal Co., 341 U.S. 114, 71 S.Ct. 670,
—iii—
AUTHORITIES CONTINUED PAGE
STATUTES:
15 US.C. $751 et seq. _..._.. SR emits Oe Cet Pat 7
Economic Stabilization Act (1970) as amended—
(12 U.S.C.A. 1904 note, P.L. 92-210, 85 Stat. 743)
Section 210(a) Xi oe cgeeenareeae 3
Section 211 (a) : <bet ol Jee eee 11
Section 211 (c) “ene ae 3, 5, 6
Section 21l(e) _. st ace a iene
Section 211(g) 2,11
Emergency Petroleum Allocation Act (1973)—
(P.L. 93-159, 87 Stat. 627, 15 U.S.C. 744) 2
Energy Policy and Conservation Act (1975)—
(P.L. 94-163, Sec. 8(b) (1) - 8
Tucker Act—
(28 U.S.C. $1346 (a) (2) ) rs | 3
CopE OF FEDERAL REGULATIONS:
6 C.F.R. $150.351 et seq. 7
6 C.F.R. Part 150, Subpart L aon 7
10 C.F.R. §212.72-212.74 5
MISCELLANEOUS:
38 Fed. Register, No. 245, 12-21-73, p. 34985 an 7
41 Fed. Register, No. 5, pp. 1564 et seq. __. 8
House Report 93-531; Conference Report 93-628,
U.S. Code Cong. & Adm. News, 93d Session, 1973,
pp. 2582, 2688 cca decals ecece
In the
Supreme Court of the United States
Octoser TERM, 19
No.
R. L. Grirrmn, Maurice LAMPE, and
ELBERT GRIFFIN,
Petitioners,
VERSUS
UNITED STATES OF AMERICA,
Respondent.
PETITION FOR WRIT OF CERTIORARI TO THE
TEMPORARY EMERGENCY COURT OF APPEALS
OF THE UNITED STATES
PETITION FOR WRIT OF CERTIORARI
Petitioners respectfully pray that a Writ of Certiorari
issue to the Temporary Emergency Court of Appeals of
the United States to review the opinion and judgment
entered in these proceedings on June 8, 1976.
Pursuant to Rule 23, Petitioners show the Court:
The opinion of the Temporary Emergency Court of
Appeals of the United States (TECA herein) is as yet
unreported, and appears as Appendix I. The opinion of
the United States District Court for the Eastern District
of Oklahoma is unreported, and appears as Appendix II.
anllies
(i) The judgment of the TECA was dated June 8,
1976, and entered the same day. This petition was filed
within 30 days after entry thereof.
(ii) No rehearing was sought. There has been no order
extending time to petition for certiorari.
(iii) Jurisdiction to review the judgment by certiorari
is granted by Section 211 (g) of the Economic Stabilization
Act of 1970, as amended (12 U.S.C.A. 1904 note, P.L. 92-210,
85 Stat. 743, incorporated by reference into the Emergency
Petroleum Allocation Act of 1973, P.L. 93-159, 87 Stat. 627,
15 U.S.C. 754).
QUESTIONS PRESENTED FOR REVIEW
(1) Is the Tucker Act available as a remedy to owners
of property who claim that their private property was taken
by the United States as a result of federal regulatory action
in the form of price controls selectively imposed on some
but not all sales of crude oil, under terms of which Peti-
tioners were forced to sell their oil at a price approximately
37° of the lawful sales price of the same oil sold by others
under similar conditions?
(2) Are Petitioners entitled to a trial on the merits, in
a Tucker Act case, of the issue of fact whether the federally
mandated two-tier crude oil price control scheme resulted
in a taking of their property for which the Constitution
guarantees just compensation?
(3) Is the question whether federal crude oil price
controls result in a taking of Petitioners’ private property
a
a “substantial constitutional question” involving the con-
stitutional validity of the law or regulations which is
appropriate for certification to and within the jurisdiction
of the TECA pursuant to Section 211 (c) of the Economic
Stabilization Act of 1970 as amended?
(4) May the TECA lawfully decide in the abstract
that federal regulatory action in the form of a two-tier
crude oil price control scheme does not constitute a taking
of private property; and thus deny Petitioners the oppor-
tunity to make their proof on the question as an issue of
fact properly raised.in a Tucker Act case?
PERTINENT CONSTITUTIONAL AND
STATUTORY PROVISIONS
The pertinent constitutional and statutory provisions
éppear as Appendix III.
STATEMENT OF THE CASE
Petitioners filed separate actions, later consolidated,
against the United States in the United States District Court
for the Eastern District of Oklahoma. Jurisdiction was
founded upon the Tucker Act (28 U.S.C. $1346 (a) (2)); and
in two of the cases seeking more than $10,009, the provisions
of §210 (a) of the Economic Stabilization Act of 1970 (See
Appendix III) vesting jurisdiction in the District Courts of
cases arising thereunder without regard to amount in con-
troversy.
These are simple Tucker Act cases in which plaintiffs
allege that federal regulatory action in the form of price
_
controls imposed on the saie of their crude oil has resulted
in a partial taking of their property by the United States
by physical appropriation, for which the Constitution,
Amendment V, guarantees them just compensation.
Petitioners are non-operating (royalty) owners of part
of the production from certain oil wells in Marshall County,
Oklahoma. Each Petitioner alleged that by reason of the
two-tier scheme he had been prohibited from selling his oil
at a price above $5.25 per barrel while at the same time
the crude oil produced from nearby leases, and elsewhere
in Oklahoma and the United States, was permitied to be
sold at the free market price of up to $14.00 per barrel.
Each further alleged that but for this price control he could
have sold his oil at the higher price. Petitioners further
asserted in effect that the two-tier price system was dis-
criminatory toward them, that it was unnecessarily and
unreasonably burdensome to them, and that it singled out
a group of property owners, including themselves, for
especially onerous treatment not shared by all those simi-
larly situated; and thus in its operation constituted a partial
taking by physical appropriation for public purposes of
their property and property rights—their shares of crude
oil produced from the leases.
As in any Tucker Act case, two issues of fact were
raised: First, whether there was in fact a taking by the
government of Petitioners’ property; and second, if there
was such a taking, the value of the property taken.
The government sought dismissal claiming lack of
jurisdiction and failure to state a meritorious claim; and in
the alternative, moved for summary judgment, claiming
absence of any issue of material fact.
—
The District Court determined that it had jurisdiction
of the causes. The TECA reached the same conclusion. The
District Court cited the basic rule that dismissal is improper
“unless it appears to a certainty that plaintiff is entitled
to no relief under any state of facts which could be proved
in support of the claim”; and pointed out that “it is clear
that governmental regulation may under certain circum-
stances be so unreasonable to be deemed a taking which
would require compensation.” Finding itself unable to “con-
clude that the Petitioners are entitled to no relief under
any state of facts which might be proved,” the District
Court denied the government’s Motion to Dismiss.
As to Summary Judgment, the District Court pointed
out that the government had belatedly filed an affidavit in
support of its motion. (To which Petitioners have not been
required to respond), which affidavit at most tended to
prove a need for price regulation, but it “does not, however,
speak to the issue of the discriminatory nature of the pricing
scheme.” The District Court noted: “Whether there has
been a ‘taking’ typically involves a question of fact”; and
accordingly denied the motion for Summary Judgment.
However, the District Court certified to the TECA as
a “substantial constitutional question,” pursuant to Section
211 (c) of the Economic Siabilization Act (See Appendix
III) the question: “Have royalty owners whose crude oil is
subject to ceiling price as determined under the regulations
(10 C.F.R. §212.72-212.74) and who may not sell their crude
oil at a price in excess of the ceiling price had their prop-
erty taken for public use for which they may recover just
compensation from the United States pursuant to the Fifth
Amendment of the Constitution of the United States?”
—
Before the TECA, Petitioners contended that the ques-
tion certified was not a “substantial constitutional issue”
involving the “constitutional validity” of the Acts or regu-
lations, and accordingly was now within the jurisdiction
of the TECA through certification under §211 (c) of the Act.
Although the TECA might have had appellate jurisdic-
tion of the cause at a proper stage, its appellate jurisdiction
was not involved here. The Order denying dismissal and
summary judgment was not appealable, and no appeal,
interlocutory or otherwise, had been perfected by the gov-
ernment from the District Court’s adverse ruling.
The TECA agreed that “should any state of facts fairly
to be contemplated within the scope of the complaints indi-
cate that there might have been an unconstitutional taking
of plaintiff's property,” a trial on the merits would be called
for.
The TECA referred to its language in earlier TECA
cases where the constitutional validity of the petroleum
price regulations was attacked upon the ground that they
“amount to a taking of private property without due process
of law.” In none of these cases was the fact of taking prop-
erty in issue. However, the TECA concluded “that our
previous rulings upholding the validity of the two-tier
system and related regulations as involving no unconstitu-
tional taking and as being otherwise valid control the
present cases.”
In this fashion, the TECA deprived Petitioners, and
all others similarly situated, of their day in court; and of
an opportunity to make their proof in support of the ques-
a
tion whether their property was taken by government
action, an issue admitted by all to be a question of fact.
The two-tier price control scheme was the work
product of the now-defunct Cost of Living Council, first
promulgated effective August 17, 1973 (6 C.F.R. §150.351
et seq.). In effect, it imposed a price ceiling of about $4.25
on about 60% of the domestic crude oil, exempting the
balance from ceiling prices. The C.L.C. announced a policy
to “continually monitor” crude oil ceiling prices, and an
intent “to make periodic upward adjustments in the ceiling
price toward the higher world prices for crude petroleum”
(6 C.F.R. Part 150, Subpari L).
Crude oil price controls were continued under the
Emergency Petroleum Allocation Act of 1973 (15 U.S.C.
§751 ct seq.) by F.E.O. and later the F.E.A. The original
authority for controls, the Economic Stabilizaiion Act of
1970, expired in 1974. The 1973 act was intended to “prevent
price gouging or price discrimination” caused by shortages
and was accompanied by a Congressional admonition that
ceiling prices be established in such fashion “that private
property is not implicitly confiscated by the government.”
(House Report 93-531; Conference Report 93-628, U.S. Code
Cong. & Adm. News, 93d Session, 1973, pp. 2582, 2683.)
New regulations later issued (38 Fed. Register, No.
245, 12-21-73, at p. 34985) repeated the policy of periodic
ceiling price adjustments to keep pace with free market
prices; and noted that when the original regulations came
out the “spread” between the ceiling price for 60°% of crude
oil sales and the free market for the other 40°> was about
$1.00. Since then the price spread had risen to $2.00, with
r —
some quotes over $4.00. Saying “spreads of this magnitude
are potentially destabilizing and cannot long be main-
tained,” the C.L.C. increased the crude oil ceiling price by
$1.00.
Although the “spread” later increased to almost $9.00
by late 1975 (or 268%), no further adjustments were made
in the ceiling price of crude oil.
The Energy Policy and Conservation Act of 1975 (P.L.
94-163) directed establishmer.. of ceiling prices resulting,
in “actual weighted average first sale price” of domestic
crude oil not to exceed $7.66 per barrel. For the first time
Congress specifically authorized “different ceiling prices for
different classifications” of crude oil, so long as consistent
with obtaining “optimum production of crude oil” (P.L. 94-
163, Sec. 8 (b) (1)).
F.E.A. regulations adopted thereunder (Fed. Register,
Vol. 41, No. 5, pp. 1564 et seq.) retained the ceiling price
of $5.25 on sales of oil previously subject to price control
(including Petitioners’) and imposed a new ceiling price of
$11.28 on oil previously uncontrolled. Thus, the “spread”
between the two ceiling prices would be $6.03, or 215%.
Since then the ceiling prices have been raised 3¢ and 7¢ to
$5.28 and $11.35, respectively, signalling a policv of further
increases in the price disparity.
_
REASONS FOR ALLOWING THE WRIT
(1) The TECA has decided a federal question in a way
probably not in accord with applicable decisions of this
Court. —
This Court consistently has held that regulation by
government imposing a burden on private property can
amount to the taking of that property. Pennsylvania Coal
Co. v. Mahon, 260 U.S. 393, 43 S.Ct. 158, 67 L.Ed. 322; Gold-
blatt v. Town of Hempstead, 369 U.S. 590, 82 S.Ct. 987, 8
L.Ed.2d 130; Block v. Hirsh, 236 U.S. 135, 41 S.Ct. 458, 65
L.Ed. 865.
It has held that while the federal government has
power to fix prices (Nebbia v. New York, 291 U.S. 502, 54
S.Ct. 505, 78 L.Ed. 940; F.P.C. v. Hope Natural Gas Co., 320
U.S. 591, 63 S.Ct. 281, 88 L.Ed. 333; Munn v. Illinois, 94 U.S.
113, 24 L.Ed. 77), the price-fixing power is not absolute,
and regulations cannot be “arbitrary, discriminatory or
demonstrably irrelevant to the policy the legislature is free
to adopt.” In re Permian Basin Area Rate Case, 390 US. 747,
88 S.Ct. 1344, 20 L.Ed.2d 312.
It has held that whether a particular regulatory action
of government amounts to a taking of private property is
“a question properly turning upon the particular circum-
stances of each case.” U. S. v. Central Eureka Mining Co.,
357 U.S. 155, 78 S.Ct. 1097, 2 L.Ed.2d 1228; U. S. v. Peewee
Coal Co., 341 U.S. 114, 71 S.Ct. 670, 95 L.Ed. 809.
Here the TECA has held as a matter of law that the
federal regulatory action involved does not result in the
taking of property, thus depriving Petitioners of the right
to a trial on the merits of issue purely on fact.
a |; a
In the decision here the TECA has extended the doc-
trine of certain of its own previous decisions to a point in
conflict with the above-cited decisions of this Court. In
cases such as Condor Operating Co. v. Sawhill (TECA 1974),
514 F.2d 351, and Cities Service Co. v. F.E.A. (TECA 1975),
529 F.2d 1016, the TECA rejected a constitutional challenge
to the validity of F.E.A. regulations on the ground that they
amounted to a taking of property without due process of
law.” In none of those cases was the fact of taking in issue
or decided.
By this case, the TECA’s ruling on the constitutional
issue is extended to deny Petitioners their day in court to
prove, if they can, that operation of the regulation results
in a partial taking of their property. The decision thus
directly contravenes controlling decisions of this Court.
In Regional Reorganization Act Cases, 419 U.S. 102,
95 S.Ct. 335, 42 L.Ed.2d 320, this Court held that the Tucker
Act is available as a remedy to persons who claim that
governmental regulation has so burdened their property
as to amount to a partial taking of it; and indeed, absent
the availability of that remedy affords due process of law
to the property owners affected, absent which the regula-
tion would be unconstitutional.
The TECA here has decided in advance, and as an
abstract principle of law, that the regulation involved here
does not result in the taking of private property. By the
decision here the TECA effectively has withdrawn the
Tucker Act jurisdiction otherwise available to plaintiffs to
seek just compensation for an alleged taking of their prop-
erty. In the Regional Reorganization Act Cases, supra, this
weiiien
Court conceded that Congress could not constitutionally
deprive a property owner of his Tucker Act remedy; cer-
tainly a court cannot do so by judicial! fiat.
(2) The TECA has assumed jurisdiction not granted
to it by law.
The TECA is a court of limited jurisdiction, having
only that jurisdiction granted by §211 of the Economic
Stabilization Act as amended (See Appendix III). It has
appellate jurisdiction of orders relating to validity of F.E.A.
actions. (See §211 (a), (e) which was not invoked here.)
The TECA (and this Court on review) has “exclusive juris-
diction to determine the constitutional validity of any pro-
vision” of the Act or regulations issued thereunder (See
$211 (g)). Whenever a district court determines that “a
substantial constitutional question exists” it is required to
certify the question to the TECA for advance decision.
Obviously, the typed “substantial constitutional question”
appropriate for such certification is one involving the “con-
stitutional validity” of the Act or regulations thereunder.
Although this Tucker Act case is “founded on the
Constitution” (U. S. v. Dow, 357 U.S. 17, 78 S.Ct. 1039, 2
L.Ed. 1109; U. S. v. Dickinson, 331 U.S. 745, 67 S.Ct. 1382,
91 L.Ed. 1789), it does not challenge the “constitutional
validity of the Act or regulations thereunder. It is no part
of a Tucker Act case to establish that the governmental
action alleged to have resulted in the taking of private
property was “constitutionally invalid.”
The question certified was not a “substantial constitu-
tional issue” involving “constitutional validity” of the Act
or regulations cognizable by the TECA through the certi-
a |
fication process; and the TECA had no jurisdiction there-
under, actual or pendent, to adjudicate fact questions or
review the Order of the District Court denying dismissal
and summary judgment.
(3) The federal question is of importance in the ad-
ministration of justice.
(a) Although the claims of the three Petitioners here
are relatively small, this litigation will determine the rights
of hundreds of thousands of persons and corporations,
large and small, who have sold crude oil at the federally-
mandated price. The number of owners affected, and the
value of property involved here far exceeds the number
and investment of bondholders involved in the Railroad
Reorganization Act Cases, supra. The TECA opinion cites
colloquy (Appendix III, footnote 23) agreeing that if there
has been a partial taking of Petitioners’ property, there has
been a similar taking of the property of all royalty owners
and working interest owners of oil wells subject to selective
F.E.A. price controls. Not quoted was further colloquy
wherein the court expressed alarm that “this case could
cost the government a hundred billion dollars”; and that
“the government could not afford” for Petitioners to prevail.
The Fifth Amendment’s guaranty of “just compensation”
for property taken is absolute; and those simple words
should never be twisted to say that when the United States
takes a little of its citizens’ property, it has to pay for it;
but when it takes a lot, it gets the property free.
(b) The two-tier crude oil price control scheme was
not enacted by Congress; it is entirely a creature of an
Administrative Agency. It represents the first time in our
==
nation’s history that a scheme of price control has been
promulgated affecting sales of a major raw material,
whereby two lawful prices have been established for the
sale of the same commodity under identical circumstances,
one lawful price being over twice as much as the other.
Any previous departure from uniformity in lawful price
regulation has been approved only where there was shown
a logical foundation for the categories to which different
ceiling prices apply; the rates and categories being estab-
lished, not by arbitrary administrative regulation; but by
a federal regulatory agency, according to traditional rate-
making principles, and after full hearing. See In re Permian
Basin Area Rate Cases, 390 U.S. 747, 88 S.Ct. 1344, 20 L.Ed.
2d 312; F.P.C. v. Texaco, Inc., .. US. , 94 S.Ct. 2315.
Even the TECA has found the two-tier crude oil price
scheme to be “inherently discriminatory as it affects the
refiners of crude oil, thus sustaining an entitlement pro-
gram” to equalize product cost among refiners, Cities Serv-
ice Co. v. F.E.A. (TECA 1975), 529 F.2d 1016; Pasco, Inc. v.
F.E.A. (TECA 1975), 525 F.2d 1391. If the dual price is
discriminatory among the buyers of crude oil, certainly it
is discriminatory among the sellers.
(4) The decision of the TECA is contrary to the intent
and the policy of the Emergency Petroleum Allocation Act.
In enacting legislation authorizing ceiling prices on
sales of crude oil at the wellhead, Congress clearly ex-
pressed its intent that “price discrimination” be avoided
and that price control not result in “private property being
confiscated” by the government. (House Report 93-531;
Conference Report 93-628, U. S. Code Cong. & Adm. News,
93d Session, 1973, pp. 2582, 2688.)
—]4—
The federal agency responsible for crude oil price con-
trol expressed an official policy of ultimate price parity;
and that a “spread” in crude oil prices currently in effect
of $2-$4 was intolerable. It requires a strong showing of
public necessity to justify a spread in lawful prices for the
same commodity in effect by virtue of federal mandate
which at one point reached $9.00 (268%) and today exceeds
$6.00 (215%). Invidious discrimination is inherent in a
price control scheme whereby two prices are established
for sales of the same commodity of general use under the
same conditions, one price being up to 2! times the other.
(5) Petitioners have been deprived of their day in
court.
Whether private property of a citizen has been taken
by government, or has been so burdened by government
regulation as to amount to a taking, is a question of fact
for decision after a trial on the merits. The District Court
so held and the TECA embraced the principle. The District
Court held that substantial fact issues remain for adjudica-
tion upon Petitioners’ Tucker Act claim for just compensa-
tion for private property allegedly partially taken by federal
regulatory action. Although the principal basis for the
TECA decision was that the F.E.A. regulations involved as
a matter of law do not amount to a taking of property, it is
obliquely suggested therein that no substantial fact issues
exist which would justify trial on the merits.
The TECA opinion as much as accuses the District
Court of partiality toward Petitioners simply because it did
not summarily dismiss their claims (Appendix I, pp. 6-7).
Then by quoting small fragments apparently gleaned
from a tape-recording made of oral argument, it seeks to
=- =
create an impression that Petitioners effectively conceded
absence of bona fide issues of fact (Appendix I, footnote
24). It is not known whether a transcript of the argument
exists, or whether this Court would deem it material to
review the decision of the TECA. If so, a full review of
the argument will clearly show that the TECA opinion
utilizes tiny fragments of the argument, taken entirely out
of context, in an effort to create an impression diametrically
opposed to Petitioners’ consistent position in this case.
Petitioners are well aware that they bear the burden
of proving that federal regulatory action in fact resulted
in a partial taking of their property. They accept the bur-
den, and ask only for their day in court.
Whenever a citizen claims that his private property
has been so burdened by federal regulatory action as to
constitute a partial taking of that property, the Tucker Act
affords him the remedy which the Constitution requires, to
seek compensation for property shown to have been taken
by federal regulatory action is essential to sustain its con-
stitutionality. Whether such federal regulatory action
actually results in the taking of private property, and the
value of any such property taken, are issues of fact for
trial on the merits of a cause filed pursuant to the Tucker
Act. For any court to deciue in advance and in the abstract,
as the TECA did here, that a particular federal regulatory
action did not result in the taking of private property,
effectively deprives the Petitioners of their Tucker Act
remedy; and deprives them of their day in court to prove,
if they can, that their property was in fact taken, and its
value. The judgment of the District Court afforded them
—16—
that right, and nothing more; the judgment of the TECA
deprived them of that right, and their Tucker Act remedy,
altogether. Accordingly, certiorari should be granted.
Respectfully submitted,
CHARLES NESBITT
620 Cravens Building
Oklahoma City, Oklahoma 73102
Counsel for Petitioners
July, 1976
APPENDIX I
TEMPORARY EMERGENCY COURT OF APPEALS
OF THE UNITED STATES
No. 10-8
R. L. GRIFFIN, PLAINTIFF-APPELLANT,
Vv.
UNITED STATES, DEFENDANT-APPELLFEE.
No. 10-9
MAuRICE LAMPE, PLAINTIFF-APPELLANT,
Vv.
UNITED STATES, DEFENDANT-APPELLEE.
No. 10-10
ELBERT GRIFFIN, PLAINTIFF-APPELLANT,
Vv.
UNITED STATES, DEFENDANT-APPELLEE.
Upon Certification by the United States District Court
for the Eastern District of Oklahoma
(Nos. 75-84-C, 75-85-C, and 75-86-C)
Submitted April 27, 1976 Decided June 8, 1976
Cuar.es Nessitt, Oklahoma City, Oklahoma, on the brief
for the Plaintiff-Appellant.
Lrnpa Pence, Attorney, Department of Justice, Washing-
ton, D. C., with whom Rex E. Lee, Assistant Attorney
General and Stanley D. Rose, Department of Justice,
Washington, D. C., were on the brief for the Defendant-
Appellee.
Before CHRISTENSEN, VAN OosTERHOUT and HASTINGS,
Judges.
[APPENDIX]
CHRISTENSEN, Judge.
These actions were brought in the district court by the
above-named plaintiffs to obtain money judgments against
the United States for the alleged taking of their property
as a result of the operation of the two-tier pricing regula-
tions on crude oil' administered by the Federal Energy
Administration under the Emergency Petroleum Alloca-
tion Act (EPAA).?
Plaintiffs are non-operating (royalty) owners of part
of the production from certain oil wells in Marshall County,
Oklahoma. Each plaintiff alleged that by reason of the two-
tier scheme he had been prohibited from selling his oi! at
a price above $5.25 per barrel while at the same time the
crude oil produced from nearby leases, and elsewhere in
‘In 1973 the Cost of Living Council, under its responsibility to de-
velop and implement a program designed to carry out the provisions of
the Economic Stabilization Act, P L. 91-379 ( Aug. 15, 1970) as amended,
promulgated the two-tier price regulations governing the price structure
at which producers could sell domestic crude oil. Thereafter, the system
was continued by the Federal Energy Office and now is administered by
the Federal Energy Administration pursuant to the Emergency Petroleum
Allocation Act of 1973, 15 U.S.C. §751 et seq. (Supp. 1973), as amended.
The two-tier pricing system for crude oil was promulgated to minimize
the inflationary impact of world-wide oil prices and to provide an incen-
tive for increased domestic production of crude oil. As originally con-
ceived it imposed a ceiling price of $5.25 per barrel on “old” oil and
allowed new and released oil to be sold without regard to the ceiling
price. The detailed discussions of the system in various aspects contained
in Cities Service Co. v. FEA. 529 F.2d 1016 ( TECA 1975); Pasco, Inc.
v. FEA. 525 F.2d 1391 (TECA 1975); Consumers Union v. Sawhill, 525
F.2d 1068 (TECA! 975); and Nadar v. Sawhill, 514 F.2d 1064 (TECA
1975), are instructive in the present context but need not be repeated
here.
* The EPAA was amended and extended by the Energy Policy and
Conservation Act (EPCA), P.L. 94-163 ( Dec. 22. 1975), 2 CCH Energy
Menagement © 10,850. The EPCA inter alia extends basic petroleum allo-
cation authority contained in the EPAA and the new oil pricing provi-
sions described in the EPCA for 40 months, will convert the oil price
control and allocation authority to standby status at the end of that period
and provides that the standby authority shall terminate five years after
enactment.
= =
[APPENDIX]
Oklahoma and the United States, was permitted to be sold
at the free market price of up to $14.00 per barrel. Each
further alleged that but for this price control he could have
sold his oil at the higher price.* Plaintiffs further asserted
in effect that the two-tier price system was discriminatory
toward them, but it was unnecessarily and unreasonably
burdensome to them, that it singled out a group of property
owners, including themselves, for especially onerous treat-
ment not shared by all those similarly situated, and that in
its operation it constituted a partial taking by physical ap-
propriation for public purposes of plaintiffs’ property and
property rights—their shares of crude oil produced from
the leases.
The United States moved for consolidation of the suits,
which motion was granted; also for ‘heir dismissal on juris-
dictional grounds, and for dismissal for failure to state
claims on which relief could be granted or in the alternative
for summary judgment on the merits. The district court
held that it had jurisdiction by virtue of the Tucker Act*
* Regulations adopted under the Energy Policy and Conservation Act
of 1975 temporarily rolled back the new oil price to $11.28, and there
will be further adjustments as the guidelines established by the EPCA are
pursued. 2 CCH Energy Management § 12,589 at 12,997-3.
428 USC. § 1346. “(a) The district courts shall have original juris-
diction, concurrent with the Court of Claims, of: ... (2) Any other civil
action or claim against the United States, not exceeding $10,000 in
amount, founded either upon the Constitution, or any act of Congress,
or any regulation of an executive department, or upon any express or
implied contract with the United States, or for liquidated or unliquidated
damages not sounding in tort... .”
Cf. 28 US.C. § 1491. “The court of claims shall have jurisdiction to
render judgment upon any claim against the United States founded either
upon the Constitution, or any Act of Congress, or any regulation of an
executive department, or upon any express or implied contract with the
United States, or for liquidated or unliquidated damages in cases not
sounding in tort... .”
—
{APPENDIX}
and Section 210(a) of the Economic Stabilization Act.® It
further concluded that neither dismissal on the pleadings
nor summary judgment was warranted because there were
unresolved issues of fact as to whether there had been a
“taking” and because it could not be concluded that plain-
tiffs’ claims were totally devoid of merit.* Finally, the
district court certified to this court, pursuant to § 211(c)
of the Economic Stabilization Act Amendments of 1971,7
the following question:
Have royalty owners, whose crude oil is subject to
the ceiling price as determined under the regulations
(10 C.F.R. $$ 212.72-212.74) and who may not sell
their crude oil at a price in excess of the ceiling price,
had their property taken for public use for which they
may recover just compensation from the United States
pursuant to the Fifth Amendment to the Constitution
of the United States?
Although designated as “appellants” in the govern-
ment’s brief, plaintiffs disaffirm that posture except for
the purposes of compliance with TECA Rule 16 (formerly
Rule 31).* They sav essentially that they were the prevail-
>" Any person suffering legal wrong because of any act or practice aris-
ing out of this title, or any order or regulation issued pursuant thereto,
may bring an action in a district court of the United States, without re-
gard to the amount in controversy, for appropriate relief, including an
action for a declaratory judgment, writ or injunction (subject to the
limitations in section 211) and/or damages.”
® Griffin v. United States, Nos. 75-84-C, 75-85-C, 75-86-C (E.D. Okla.
Feb. 10, 1976).
712 USCA. § 1904 note, P.L. 92-210, incorporated by reference into
the Emergency Petroleum Allocation Act of 1973, 15 USC. § 754.
S(b) When a constitutional issue is certified by a district court the
clerk will upon receipt thereof from the district court notify the plaintiff
in the district court, who shall promptly pay the docket fee, after which
the case will be placed on the docket. . . .
(d) The brief of the party who was plaintiff below shall be filed within
20 days after the certificate has been filed with the court.
’ [APPENDIX]
ing party below;* that the lower court committed no error
except by acceding to the suggestion of the United States
that the constitutional issue be certified to this court; that
“this is a simple Tucker Act case” involving only the fact
questions of whether plaintiffs’ preperties were taken by
the United States and the value of any property found to
be so taken; and that, except for its apprehension of some
constitutional obstacle, the district court was right in hold-
ing that a trial on the merits was required.
We are assured by plaintiffs that we need not be con-
cerned with our prior decisions holding, or accepting such
conclusion as the premise for related determinations, that
the two-tier pricing system does not involve any uncon-
stitutional taking.'® They tell us that they do not contest
the constitutionality of the FEA regulations; indeed, that
they concede their constitutionality, and say that they
necessarily must do so to be entitled to Tucker Act com-
pensation, citing Tempel v. United States, 248 U.S. 121
(1918); United States v. Georgia Marble Co., 106 F.2d
955 (5th Cir. 1939), and Kirk v. United States, 451 F.2d
690 (10th Cir. 1971), cert. denied, 406 U.S. 963 (1972), to
demonstrate that “any taking or destruction of property
which is contrary to or unauthorized by Act of Congress
would constitute a tortious injury to property for which
compensation cannot be recovered under the Tucker Act.”
They say that their cases depend not upon the unconstitu-
tionality of the regulation but upon factual problems which
can be resolved only by trial and suggest that at trial they
can show severe impact against them of what they charac-
terize as discriminatory pricing. Thus plaintiffs conclude
9 Such desixisiions have no significance in the presen’ context except
for identification purposes. W’e shall here refer to plaintiffs as such, rather
than as appellants.
10 Cities Service Co. v. FEA, 529 F.2d 1016 (TECA 1975), supra:
Pasco, Inc. v. FEA, 525 F.2d 1391 (TECA 1975), supra; Consumers
Union v. Sawhill, 525 F.2d 1068 (TECA 1975), supra; Nadar v. Sawhill,
514 F.2d 1064 (TECA 1975), supra.
—Yyj—
[APPENDIX)
that only fact issues are involved and that the district
court’s certification of the constitutional auestion was un-
justified.
With the latter conclusion although not with the rea-
soning by which it was reached, the government agrees.
It argues that certification was improvidently granted
because no substantial constitutional issue exists, the con-
stitutionality of the pricing system already having been
sustained by this court. It fails to consider that, if this
were so, remand without further determination on our
part might be called for''—a disposition that would be
welcomed by plaintiffs since it would remit them for trial
to a district court apparently favorable to their position
on the law. To the contrary, the government asks us to
determine “that the district court erred in not granting
its |the government’s| motion to dismiss or in the alterna-
tive for summary judgment.” And it argues on the basis
of Regional Rail Reorganization Act Cases, 419 U.S. 102
(1974), that looking at the language of § 211 of the Stabiliza-
tion Act and its legislative history, and considering the
svecial nature of price controls, Congress intended to with-
draw the Tucker Act remedy to parties in the position of
plaintiffs—-a proposition which if essential to counter plain-
tiffs’ claims might itself raise a constitutional problem.??
'1Shapp v. Simon, 510 F 2d 379 (TECA 1975); National Petroleum
Refiners Association v. Dunlop, 484 F 2d 1388 (TECA 1973). Cf. Con-
dor Operating Co. v. Sawhill. 514 F.2d 351 (TECA). cert. denied, 421
US. 976 (1975), supra. See also. Carpenters 46 Cry. C. Bd. v. Construc-
tion Ind. St. Com., 525 F.2d 637 (TECA 1975).
12 Before the district court the government had contended in the rail
reorganization litigation that the law was constitutional because the
Tucker Act afforded a remedy by way of just compensation for any pri-
vate property taken in its execution. See Connecticut Gen. Ins. Corp. v.
United States Ry. Ass’n., 383 F.Supp. 510 (E.D. Pa.), rev'd sub nom,
Regional Rail Reorganization Act Cases, 419 US. 102 (1974), in which
a three-judge District Court held the law unconstitutional because it
found the Act negated any Tucker Act remedy for just compensation
(419 US. at 119). The Supreme Court reversed, indicating that govern-
—vii—
[APPENDIX}
As if this welter of points and counterpoints were not
enough, the government asks us to determine that the
district court had no jurisdiction to entertain plaintiffs’
suits in the first instance and thus that we have no appel-
late jurisdiction. The possible expanse of such a bar is
indicated by its further argument that any right plaintiffs
might have for monetary relief under the Tucker Act would
be in effect cut off by the exclusivity of EPAA processes
which afford to private parties against the government
only the declaratory or injunctive relief provided by § 211
of the Economic Stabilization Act.
JURISDICTION
The government contends that § 210 does not authorize
any type of suit against the government but only “private”
actions for declaratory, injunctive or monetary relief and
that § 211 is merely a limitation of that right and not a
complementary grant of jurisdiction to the district courts.
Air Products and Chemicals, Inc. v. United Gas Pipeline
Co., 503 F.2d 1060, 1063 (TECA 1974); Brennan Petroleum
Products Co., Inc. v. Pasco Petroleum Co., Inc., 373 F.Supp.
1312, 1313 (D Ariz. 1974); McGuire Shaft and Tunnel Corp.
v. Local No. 1791, UMW, 475 F.2d 1209 (TECA), cert.
denied, 412 U.S. 958 (1973), and Gas-A Tron of Arizona v.
Union Oil, CCH Energy Management { 9710, and certain
legislative history'* are cited in supnort of this contention.
12 [Continued]
mental regulation of private property may amount to a taking for which
the Sth Amendment would require just compensation, that the Tucker
Act must be deemed available as a remedy unless jurisdiction thereunder
was affirmatively withdrawn; that the Rail Act contained no specific
language withdrawing Tucker Act jurisdiction; and that since amend-
ments by implication are disfavored, and a construction upholding consti-
tutionality must be adopted if possible, there was no implied withdrawal
of Tucker Act jurisdiction. ;
13 "Section 210 provides a judicial method by which violators of regu-
lations may be discovered and other would-be violators may be deterred.
—viii—
[APPENDIX)}
Plaintiffs counter that there is no such limitation by
the terms of the Act and that the restriction (of § 210 (a) )
to “private suits” as suggested by the legislative history
and dicta in some of our decisions must be deemed to relate
only to the recovery of treble damages or other relief
against persons renting property or selling goods or services
pursuant to § 210(b). They also contend that § 211 operates
in their case merely to waive the jurisdictional amount
limitation of the Tucker Act, and that their entitlement
to sue basically rests upon the broad language of § 210(a).
We think on the question of jurisdiction that plaintiffs
are nearer the mark. But the positions of both parties fail
to collate and reconcile sufficiently the two sections, which
present a harmonious treatment of both jurisdiction of
the respective courts and the right of aggrieved persons
to bring actions for “legal wrongs” arising out of acts,
practices, orders or regulations under EPAA. Assuming
that plaintiffs are right in considering that § 211'4 removes
1 [Continued }
This can be accomplished by authorizing a person suffering illegal wrong
to bring a treble damage action against the violator.”
“This action is intended to be brought by private persons against other
private persons. The government will not bring such action nor be the
subject of one... .” S. Rep. No. 92-507, 92nd Cong., Ist Sess. (1971),
US. Code Cong & Admin. News, 2283, 2291.
149 211. Judicial review
(a) The district courts of the United States shall have exclusive orig-
inal jurisdiction of cases or controversies arising under this title, or under
regulations or orders, issued thereunder, notwithstanding the amount in
controversy, except that nothing in this subsection or in subsection (h)
of this secuion affects the power of any court of competent jurisdiction to
consider, hear, and determine any issue by way of defense (other than a
defense based on the constirutionality of this ticle or the validity of action
taken by any agency under this title) raised in any proceeding before
such court. If in any such proceeding an issue by way of defense is raised
based on the constitutionality of this title or the validity of agency action
under this title, the cases shall be subject to removal by either party to a
district court of the U’nired Srates in accordance with the applicable pro-
visions of chaprer 89 of title 28, Unired States Code.
=
[APPENDIX]
the jurisdictional amount bar that would otherwise apply
to two of the claims, that section serves the more basic
purpose also of establishing the overall jurisdiction of the
courts involved, with implementing exclusivity and limita-
tion provisions that must be read independently as well as
in relation to § 210.15 Subdivision (a) of the latter section
deals with the specified right of those suffering “legal
wrong” to sue, thus utilizing the jurisdiction afforded by
14 {Continued}
(b)(1) There is hereby created a court of the United States to be
known as the Temporary Emergency Court of Appeals. . . . Except as
provided in subsection (d)(2) of this section, the court shall not have
power to issue any interlocutory decree staying or restraining in whole or
in part any provision of this title, or the effectiveness of any regulation
or order issued thereunder. In all other respects, the court shall have the
powers of a circuit court of appeals with respect to the jurisdiction con-
ferred on it by this title.
(d)(2) A district court of the United States or the Temporary Emer-
gency Court of Appeals may enjoin temporarily or permanently the appli-
cation of a particular regulation or order issued under this title to a person
who is a party to litigation before it. . . .
(e) (1) Except as provided in subsection (4) of this section, no inter-
locutory or permanent injunction restraining the enforcement, operation,
or execution of this title, or any regulation or order issued thereunder,
shall be granted by any district court of the United States or judge thereof.
Any such court shall have jurisdiction to declare (A) that a regulation
of an agency exercising authority under this title is im excess of the
agency's authority, is arbitrary or capricious. or is otherwise unlawful
under the criteria set forth in section 706(2) of title 5, United States
Code, or (B) that an order of such agency is invalid upon a determina-
tion that the order is in excess of the agency's a:nhority, or is based upon
findings which are not supported by substantial evidence. . . .
15 § 210. Suits for damages or other relief
(a) Any person suffering legal wroug because of any act or practice
arising out of this title, or any order or regulation issued pursuant thereto,
may bring an action in a district court of the United States, without re-
gard to the amount in controversy, for appropriate relief, including an
action for a declaratory judgment, writ of injunction (subject to the limi-
tations in section 211), and/or damages.
(b) In any action brought under subsection (a) against any person
renting property or selling goods or services who is found to have over-
—X—
[APPENDIX]
s 211. And § 210(b) deals with a specified type of legal
wrong. As so read, the two sections furnishing the basis of
the involvement of the courts and the right to judicial
relief on the part of affected private parties are consistent
and comprehensive. They thus should be construed in
accordance with their terms; and, again, we should not be
quick to assume accidental or careless language on the part
of the Congress where considerate purpose may be seen
in the words it employed.'®
The fact that “private suits” such as those brought by
plaintiffs name as defendant, and seek monetary damages
against, the United States no more renders them public
suits than are claims brought by private individuals to
recover damages against the United States, for example,
under the Tort Claims Act. The characterization of such
suits as something other than private suits contemplated
by § 210(a) even though it is assumed they involve legal
1 [Continued]
charged the plaintiff, che court may, in its discretion, award the plaintiff
reasonable attorney's fees and costs, plus whichever of the following sums
is greater:
(1) An amount not more than three times the amount of the over-
charge upon which the action is based, or
(2) not less than $100 or more than $1.000; except that in any case
where the defendant establishes that the overcharge was not intentional
and resulzed from a bona fide error notwithstanding the maintenance of
procedures reasonably adapted to the avoidance of such error the liability
of the defendant shall be limited to the amount of the overcharge; Pro-
vided, that where the overcharge is not willful within the meaning of
section 208(a) of this title, no action for an overcharge may be brought
by or on behalf of any person unless such person has first presented to
the seller or renter a bona fide claim for refund of the overcharge and
has not received repayment of such overcharge within ninety days from
the date of the presentation of such claim.
(c) For the purposes of this section, the term “overcharge” means the
amount by which the consideration for the rental of property or the sale
of goods or services exceeds the applicable ceiling under regulations or
orders issued under this title.
16 Cf. Exxon Corp. v. FEA, 516 F.2d 1397 (TECA 1975).
oxi
[APPENDIX]
wrong arising under EPAA, and precluding any action
against the government pursuani to the latter section*?
seem difficult to justify.'®
We believe that if or to the extent plaintiffs suffered
legal wrong because of any taking of their property as a
result of the two-tier oil pricing system, they would have
the right to utilize the jurisdiction afforded in the district
court by § 211 by bringing the type of action contemplated
by § 210(a) for damages, there being no limitations in § 211
to the contrary.
17 Appellee’s counsel at oral argument: “. . . We disagree with the
district court. We do not think that § 210 provides jurisdiction for a
direct action against the government. We disagree with appellants’ con-
tention at the Tucker Act provides jurisdiction.
“Question from the Court: On your jurisdiction issue, you wouldn't
controvert the one under $10,000 would you?
“A. No, Sir.
“Q. So that at least the issues are raised as to one under $10,000; we
can’t get rid of that on jurisdiction?
“A. Right... The only jurisdictional statute for a direct action against
the government is § 211 ... The core issue is whether the two-tier
pricing system constitutes a taking... .”
1S Question from the Court during oral argumenz: “Let us assume
here that the plaintiffs are correct in saying that there was a taking for
which they were entitled to compensation somehow and somewhere. If
your position of jurisdiction was right would they not be entirely without
a remedy?—They couldn’t go to the Court of Claims because it would
be liability arising under the Petroleum Act; aad you say they could not
come... to the district court under the Petroleum Act because there is
no way ... that they can sue the government for money damages. . . .
“A. ... Let's assume there's a compensable taking . . . the remedy is to
come in and sue the Federal Energy Administration and have the two-tier
pricing system declared unconstitutional—
"Q. No, no. The taking has already been accomplished. What you're
suggesting is that they preclude further taking but what they want is
compensation for past taking.
“A. In that case... the district court has exclusive jurisdiction and
you have exclusive jurisdiction of the appeal . . . The remedy they have
would not be for past damages but to declare the regulatory scheme itself
unconstitutional.”
—xii—
(APPENDIX)
CERTIFICATION
We have also concluded that the constitutional prob-
lem certified by the district court is not insubstantial. It
is to be observed that heretofore we have not been directly
confronted with the contention that the two-tier pricing
system, as such and in its broad aspects, is unconstitutional
by reason of invidious discrimination and as a taking of
property contrary to the Fifth Amendment. Our considera-
tion of the problem has been in relation to narrower aspects,
such as the Old Oil Entitlement Program as applied to
major refiners (Cities Service), as applied to small refiners
(Pasco), the freeze of supplier-purchaser relationships
(Condor), the statutory mandate for “regulating” new oil
prices (Consumers Union), and the propriety of increasing
the controlled price of old oil (Nadar). Notwithstanding
our sustaining of the constitutionality of aspects of the pro-
gram against general claims that it operated to take private
property without just compensation contrary to the Fifth
Amendment, plaintiffs’ contentions in the context of the
Tucker Act involve a new dimension and approach which
as far as we have been able to determine is of first im-
pression. Sheer novelty of a legal contention does not
underwrite its substantiality, but it does militate against
summary application of the doctrine of stare decisis and
may commend the reading of smaller print as well as the
caption.
While our attention has been called to no case where
the award of damages based upon losses suffered as the
result of the operation of a regulatory system within
the police power have been finally approved, Mr. Justice
Holmes’ oft quoted language has been interpreted to sug-
gest as much.'* On the contrary, however, what he could
19" [While property may be regulated to a certain extent, if regu-
lation goes too far it will be recognized as a taking.” Pennsylvania Coal
Co. v. Mahon, 260 US. 393 (1922).
—xiii—
[APPENDIX]
have had in mind was the propriety of the continued
operation of the regulations rather than the remedy of
compensation for an unauthorized taking. This applies also
to other case cited by plaintiffs.*° Regional Rail Reorgani-
zation Cases is in the context of possible compensation for
a taking, although the facts are essentially different.
Plaintiffs say that their cases involve such oppressive
circumstances on the facts as to demonstrate that there
has been a compensable taking within the reach of the
statements relied upon. Whether there are facts within
the scope of the complaint that could justify such a result
despite prior decisions upholding the constitutionality of
the regulations in question against other attacks, seems an
inquiry worth confronting along the flank of the primary
issue as we see it—the effect of our prior decisions uphold-
ing the validity of the two-tier system.
Nor has the argument relied upon by plaintiffs been
presented heretofore in the context of the constitutional
problem that would be confronted were a claim for
Tucker Act damages accepted by a district court in the
sense of preem, tion through the judicial review processes
of the Economic Stabilization Act adopted in EPAA, but
rejected because those provisions do not permit adjudica-
tion of such a claim, however meritorious. There are also
important related concerns which go to the very viability
of statutes and regulations designed to cope with the
national energy crises or other emergencies through allo-
cations or price controls. For these reasons we think it
would be inappropriate to remand the case to the district
court on the view that the constitutional question certified
is frivolous or insubstantial.
2 United States v. Central Eureka Mining Co., 357 U.S. 155 (1958);
Goldblatt v. Town of Hempstead, 369° U.S. 590 (1962), and Block v.
Hirsh, 256 US. 135 ( 1921}. Cf. Monarch Inc. Co. v. District of Colum-
bia, 353 F. Supp. 1249 (DDC. 1973).
—xiv—
[APPENDIX]
THE PROBLEM OF “A TAKING”
The district court, apart from the constitutional ques-
tion that it perceived, denied the defendant’s motion to
dismiss or in the alternative for summary judgment,
indicating its view that there could be facts shown by
evidence to establish that plaintiffs’ property had been
taken contrary to constitutional guarantees.
We agree with appellants that should any state of
facts fairly to be contemplated within the scope of the
complaints indicate that there might have been an un-
constitutional taking of piaintifis’ property, the question
certified by the district court would have to be answered
in the affirmative and the case remanded for trial on the
merits.*' If, on the contrary, it is apparent as a matter
of law that under facts reasonably to be contemplated
within the purview of the complaints the plaintiffs cannot
prevail on the theory thereby revealed, the answer to the
questions should be in the negative. We do not deal with
mere abstractions in responding to certified constitutional
issues, however worded, and we need not close our eyes
to pendant considerations or consequences. **
THE ALLEGED FACT RESIDUALS FOR TRIAL
Aside from the mere characterization “discriminatory,”
we cannot find in the complaints any indication of cir-
cumstances that would place the plaintiffs in a position
=! Material fact problems, as the trial cour: recognized, are not to be
resolved on motions to dismiss or for summary judgment. Fed. R. Civ. P.,
rules 12(b) (G6), 56.
=2 Section 211¢b)(2)(¢), sapra, reads in part: “. .. Upon such certifi-
cation, the Temporary Emergency Court of Appeals shali determine the
appropriate manner of dispositon, which may include a determination
thar the entire action be sent to it for consideration or it may, on the
issues certified, give binding instructions and remand the action to the
certifying court for further disposition.” See also Condor Operating Co. v
Sawhill, 514 F.2d 351 (TECA), cert. dented, 421 US. 976 (1975), supra.
- [APPENDIX]
essentially different than that of the refiners attacking the
entitlement program in Cities Service and Pasco. Counsel
for appellants has been hard put to suggest any.?* The
price disparity under which the objectors must do business
is the gist of the complaint in each case. Plaintiffs’ brief
refers vaguely to undisclosed “facts” which might be pre-
sented if a trial were to be had to demonstrate that there
was an actual taking by the operation of the two-tier pricing
program. The only type of evidence which plaintiffs’ counsel
suggested at oral argument as being within the scope of the
complaints and beyond that of which we could take judicial
notice, went to matters of policy, wisdom or overall effect
of the regulations.**
23 Ac the oral argument following colloquy between plaintiffs’ counsel
and rhe court occurred:
Q. ou mention that the royalty owners are the “forgorten | = all
Is the situation of a royalty owner in character or kind essentially different
than the situation of a well operator or a refiner with reference to the
two-tier pricing system?
A. Slightly as to a well operator because the royalty owner pays no
part of operating expense.
Q. Why would that differentiation put you in a different position? ...
A. Because the royalty owner has no control over the maneuvering to
get the higher price, and there is considerable of it . . . the drilling of
additional wells and all of these things. . . .
Q. Bur if your argument is true with respect to royalry owners would
it not also be correct as far as the operator is concerned?
A. Yes.
24". [Whar within the scope and purview of your pleading which
is a limiting factor could you prove which would show that in your case
there was a taking that couldn’r be relied on as a matter of law in any
case.
A. Give me just a moment to answer—
Q. Just tell us what you would prove within the purview of your
pleadings at the trial that we couldn’: take notice of now in determining
the question as a matter of law.
A. We will be able to prove that first the two-tier system as it devel-
oped . . . with the widespread—it's a matter of magnitude—
—xvi—
[APPENDIX)}
We are convinced that the exploration by the district
court of such matters would not only be futile but gra-
tuitous, and could not alter the results of the cases. This
would no doubt be so even though the district court might
invest a substantial part of the months or even years the
agency, with its extensive personnel, its administrative
authority and responsibility and its presumed expertise
has devoted to such problems.
THE DECISIVE PROBLEM OF LAW
The fatal flaw in plaintiffs’ position is the assumption
that the operation of the two-tier pricing system is lawful
and constitutional and yet that it would give rise to an
action for damages under the Tucker Act. The theory
that their cases are comparable to actions in reverse
condemnation is unsound. No implied contract can be
constructed in the context of this case. If the operation
of the regulations is constitutional, as we have held, be-
=4 [Continued]
Q. We can take judicial notice of thar . . . But tell me what peculiar
proof you have which sets your case apart from all other cases.
A. ... {W]e will prove that the two-tier pricing system in its practice
discourages exploration and does not encourage it. The increased produc-
tion of oil and gas it does not encourage. it rewards sloth and wasteful-
ness in production rather than the reverse.
Q. That's a matter of policy. Are those the only type of things?
A. Permit me to disagree. Those are the matters that tend to show a
taking... .
Q. Then you'll prove the disparity ard then you'll prove the regulation
is not wise because it discourages rather than encourages production.
Whar else would you prove?
A. And we will prove that the purpose of the regulation is indeed to
fight inflation but it does not apply equally to ail persons similarly situated
burt a group of property owners including my clients are sought out to
bear the brunt of a regulation.
Q. What could you prove that we could not take judicial notice of?
A. Little or nothing. ... You know as well as I do . . . That is going
to be the thrust of our testimony.
—xvii—
[APPENDIX]
cause it does not involve a taking of property without
just compensation but constitutes a legitimate exercise of
the police power, the admission of this premise by the
plaintiffs cannot convert the non-taking into a compensable
taking.*° No sufficient reasons appearing to the contrary,
we conclude that our previous rulings upholding in prin-
ciple the validity of the two-tier system and related
regulations as involving no unconstitutional taking and
as being otherwise valid control the present cases. And
the broad point being so vital to the continuing statutory
and regulatory structure,?® we are constrained notwith-
*5 Plaintiffs say that in such cases as Cities Service Co. v. FEA, 529
F.2d 1016 (TECA 1975), supra, Western States Meat Packers Ass'n, Inc.
v. Dunlop, 482 F.2d 1401 (TECA 1973), and Local No. 11, IBEW v.
Bolt, 481 F.2d 1392 (TECA 1973), “the courts in effect are saying that
the fact that federal re action results in a —— private prop-
erty does not render it invalid or unconstitutional . . . [because] if a per-
son believes his property has been taken, he can always sue for its value.”
We do not agree. To the contrary. the cases cited held that the regulations
there in question were valid because among other things they did not
involve a taking and thus were constitutional. See also Condor Operating
Company v. Sawhill, 514 F.2d 351 (TECA), cert. denied, 421 US. 976
(1975), supra, to the same effect.
26In both the EPAA (see H.R. Conf. Rep. No. 93-682, US. Code
Cong. & Adm. News, 93d Cong., Ist Sess., p. 2688, 2702 (1973) ), and
the EPCA (see its § 401(a); also Senate Conf. Rep. No. 94-516, US.
Code Cong. & Adm. News, 94th Cong., Ist Sess., p. 1956 (1975) ); Con-
gress accepted a continuation of the two-tier pricing system as an essential
part of price controls until phased out as directed by the last-mentioned
Act. It seems likely that the government is right in its argument that the
power to regulate prices at all could not survive if plaintiffs’ theory of
compensation were to prevail. If those whose property values were dimin-
ished by price controls in the sense that plaintiffs’ claim theirs have been
must be awarded compensation for their “loss” of profits under an implied
contract theory or otherwise, legislative attempts to control prices would
be frustrated. In considering such “losses,” particularly in connection with
the oil allocation program, there seems no possibility of weighing the
complex factors that wou'd be involved in achieving any balance of the
immediate detriments and overall benefit. Inbuilt into the two-tier system
have been entitlements, and exceptions relief (see e¢.g., Cities Service.
supra, Pasco, supra, and Amtel, Inc. v. FEA, F.2d (TECA No.
5-15, May 25, 1976) ), for promoting competition and ameliorating in-
—xviii—
[APPENDIX]
standing plaintiffs’ somewhat oblique attack, to reiterate
expressly in the broad context of the present cases that the
two-tier oil pricing system is constitutional both as indicated
by our prior rulings and because of the reasons set out in
those rulings with reference to closely related problems.**
Accordingly, in response to the certified question, we
hold in the context of these cases that royalty owners
whose crude oil was subject to the ceiling price as de-
termined under the regulations in question (10 C.F.R.
$$ 212.72-212.74) and who may not sell their crude oil at
a price in excess of the ceiling price have not had their
property taken for public use for which they may recover
compensation from the United States pursuant to the Fifth
Amendment to the Constitution of the United States, or
at all.
In view of this answer it is obviors and pendant in
the same context** that plaintiffs’ complaints should he
2% [Continued }
equities and hardships to the extent deemed practical and consistent with
statutory objectives. The EPCA has established guidelines based upon a
continuation of the two-tier system as controlled by 1 composite pricing
formula and continuing overview by the Congress pending the phasing
out of controls. In line with continuing responsibilities under the latest
Act, the agency is pursuing additional administrative measures in an
effort better to achieve the objectives of the program, as manifested by
pending rule making, following two prior phases, in the “Third Stage of
Implementation of the Energy Policy and Conservation Act” (see CCH
Energy Guidelines § 12,612). The current statutory treatment and such
continuing efforts could be thrown into confusion if plaintiffs’ conten-
tions were ultimately approved. The wisdom, or lack of wisdom, of con-
gressional policy within constitutional limitations is not our concern. But
needless shadowing of that policy by any failure to address directly the
issues necessarily before us would be unjustified.
27 See particularly Cities Service Co. v. FEA. 529 F.2d 1016, 1025-29
(TECA 1975). supra; Pasco, Inc. v. FEA, 525 F.2d 1391 (TECA 1975);
Condor Operating Co. v. Sawhill, 514 F.2d 351. 359-62 (TECA), cert.
denied, 421 US. 976 (1975), supra. See also Western States Meat Pack-
ers Ass'n, Inc. v. Dunlop, 482 F.2d 1401, 1403-06 (TECA 1973), supra;
Local No. 11, IBEW v. Bolt, 481 F.2d 1392, 1395-96 (TECA 1973).
2815 USC. § 211(b) (2) (c), supra.
ee
I ee
—xix—
[APPENDIX])
dismissed for failure to state claims on which relief could
be granted.
Remanded to the district court with directions to dis-
miss the complaints.
—xx—
APPENDIX II
FILED
FEB 10 1976
Lewis L. VAUGHN
Clerk, U. S. District Court
By
Deputy Clerk
IN THE UNITED STATES DISTRICT COURT FOR
THE EASTERN DISTRICT OF OKLAHOMA
R. L. GRIFFIN, )
Plaintiff, )
-VS- ) No. 75-85-C
)
UNITED STATES, )
Defendant. )
MAURICE LAMPE, )
Plaintiff, )
-VS- ) No. 75-84-C
)
UNITED STATES, )
Defendant. +?)
)
ELBERT GRIFFIN, )
Plaintiff, )
-VS- ) No. 75-86-C
)
UNITED STATES, )
Defendant. _)
ORDER AND CERTIFICATION TO THE
TEMPORARY EMERGENCY COURT OF APPEALS
The plaintiffs have brought these three cases to recover
compensation for property rights allegedly taken by the
United States as a result of the two-tier price regulations
on crude oil administered by the Federal Energy Admin-
istration (FEA) pursuant to the Emergency Petroleum
ee
bmn. ete mtenlil t 4
Baiedthdeenns oe
—xxi—
[APPENDIX]
Allocation Act. 15 U.S.C. §751 et seq. The plaintiff in each
of these cases is a royalty owner of an interest in the oil,
and gas and other minerals located in and under and pro-
duced from certain real property located in Marshall
County, Oklahoma.
Each plaintiff alleges that from December 19, 1973, the
ceiling price on royalty oil produced from his land has been
fixed at $5.20 per barrel whereas the price on other crude
oil produced in the immediate vicinity of his land and else-
whe ‘n Oklahoma and in the United States, with the same
intrinsic value and the same energy content as his oil is
sold, under the law and regulations, at market price, which
is approximately $12.00 per barrel. In paragraphs 1 and 10
of each complaint, it is alleged as follows:
“1. This is an action against the United States
founded upon the 5th Amendment to the United States
Constitution, to receive just compensation for property
taken by the United States for public purposes by
physical appropriation, for which no compensation has
been paid.
“10. The actions of the defendant in preventing
plaintiff from selling his crude oil at the current free
market price, and forcing plaintiff to accept a price
therefore substantially less than the free market price
diminished the value of plaintiff’s property, and con-
stituted a partial taking, by physical appropriation for
public purposes, without just compensation, of plain-
tiff’s property and property rights in the portion of the
crude oil produced from the above lands owned by
plaintiff. The public purposes for which the property
was taken were to enable United States citizens and
the American consumers generally to enjoy the benefits
of the energy produced from crude oi!, including the
oil owned by plaintiff, at a cost to them less than if
the price were permitted to find its own level in a free
market.”
—xxii—
[APPENDIX]
The defendant has filed a motion to dismiss or in the
alternative for summary judgment in each of these cases
and has filed a brief in support of its position. To the mo-
tions the plaintiffs have filed identical responsive briefs and
the defendant has filed a supplemental brief in reply to the
plaintiff's response. In view of the importance of the issues
raised the Court set the matter and has heard extensive
oral argument. Because of the similarity of the issues pre-
sented the three motions will be considered together.
The defendant seeks dismissal claiming lack of juris-
diction, failure to state a claim upon which relief can be
granted, and lack of the existence of any issue of material
fact therefore entitling the defendant to summary judgment
under Rule 12(b) and Rule 56, Federal Rules of Civil Pro-
cedure. The defendant also argues that if the Court con-
cludes that it does have jurisdiction and that the complaint
does raise a substantial constitutional issue that the issue
must be certified to the Temporary Emergency Court of .-
Appeals. 12 U.S.C. $1904 (note 211(c)). Each of defendant's
claims will be treated separately.
Jurisdiction.
The plaintiffs base jurisdiction of their claims on the
Tucker Act (28 U.S.C. §1346(a)(2) and $210 of the 1971
Amendment to the Economic Stabilization Act (P. L. 92-
210), 12 U.S.C. $1904 ‘note $210).
28 U.S.C. $1346(a) (2) provides:
“The district courts shall have original jurisdiction,
concurrent with the court of claims, of ... (2) any
other civil action of claim against the United States,
not exceeding $10,000 in amount, founded either upon
the Constitution, or any Act of Congress, or any regula-
tion of an executive department, or upon any express
or implied contract with the United States, or for liqui-
dated or unliquidated damages in cases not sounding
|) are
a ee we
—xxiii—
[APPENDIX]
The claims of both plaintiffs, R. L. Griffin and Maurice
Lampe, are for more than $10,000, while plaintiff Elbert
Griffin’s claim is for less than $10,000. The plaintiffs claim
that both the restrictions as to maximum jurisdictional
amount in the Tucker Act and the minimum jurisdictional
amount required by 28 U.S.C. $1331(a) have been removed
as to actions under the Economic Stabilization Act, 12 U.S.C.
£1904 note (§210(a)) which provides:
“Any person suffering legal wrong because of any
act or practice arising out of this title, or any order or
regulation issued pursuant thereto, may bring an action
in a district court of the United States, without regard
to the amount in controversy for appropriate relief,
including an action for a declaratory judgment, writ
of injunction (subject to the limitations in section 211),
and ‘or damages.”
The defendant does not contend that the jurisdictional
amount is an issue but argues that section 210 applies only
to actions against private defendants and does not apply to
actions against the United States. Therefore, the defendant
argues that unless the plaintiffs amend their complaint to
properly allege jurisdiction under §211 their actions must
be dismissed.
Section 211 of the Economic Stabilization Act provides
in part:
“The district courts of the United States shall have
exclusive original jurisdiction of cases or controversies
arising under this title, or under regulations or orders
issued thereunder, notwithstanding the amount in
controversy... .”
It is clear that one purpose of £210 is to create a remedy
for private parties against private violators of the regula-
tions. (See §210(b) and (c)). The legislative history sup-
ports this conclusion. Senate Report No. 92-507 states:
—xxiv—
[APPENDIX]
“Section 210 provides a traditional method by which
violators of regulations may be discovered and other
would-be violators may be deterred. This can be ac-
complished by authorizing a person suffering a legal
wrong to bring a treble damage action against a vio-
lator.
“This action is intended to be brought by private
persons against other private persons. The government
will not bring such action nor be the subject of one.
“Any person suffering legal wrong because of any
act or practice arising out of the operation of this act
or because of any regulation or order issued under the
act may bring an action in a federal district court,
without regard to the amount in controversy, and may
seek all appropriate relief including a declaratory judg-
ment, an injunction (except as limited by the pro-
visions of section 211 of this Act), or damages.” S. Rep.
No. 92-507 2 U.S. Code Cong. Admin. News, 92nd Cong.,
Ist Sess. 2291 (1971).
However, the legislative history relied upon by the
defendant is not explicit and is ambiguous concerning
whether this is the only purpose of the statute; it is far
more ambiguous than the statute itself. Although subsec-
tions (b) and (c) of section 210 clearly relate to treble
damage actions against private parties, subsection (a) is
not so limited. Section 210(a) provides for suit in a district
court of the United States by: “[a]ny person suffering legal
wrong because of any act or practice arising out of this
title, or any order or regulation issued pursuant thereto.
..” (Emphasis added. )
The language of Section 210(a) simply does not restrict
actions brought thereunder to those “brought by private
persons against other private persons.” This conclusion is
further supported by the fact that section 210(a) is ex-
pressly made “subject to the limitations in section 211” as
ce ee ee ed
et Oe ne ee
ee
Rds eee ee
—xxv—
[APPENDIX]
to injunctive relief. The limitations referred to can only be
the limitations in section 211 which limit the power of a
district court or the Temporary Emergency Court of Ap-
peals to enjoin or set aside regulations by agencies of the
government. (See §211(d) and ‘*).
“Since the statute is clearly written, and the ‘injunc-
tion’ issued in these cases was ‘appropriate relief’
specifically provided in $210(a), it is unnecessary to
look to the legislative history to ascertain the intent of
congress; .. .” McGuire Shaft & Tunnel Corp. v. Local
U. No. 1791, U.M.W., 475 F.2d 1209 at 1213 (TECA
1974).
Therefore, Congress must have contemplated that such ac-
tions could include an attack on agency regulations. Since
an attack on agency regulations might require that the
agency, the agency officials or the United States be made
parties defendant, Congress must have intended section
210(a) to apply to actions against the United States as well
as to private defendants. And the Temporary Emergency
Court of Appeals has so construed it.
In Air Products and Chemicals, Inc. v. United Gas Pipe
Line Co., 503 F.2d 1060 (TECA 1974) that court had before
it an action brought by plaintiff, Air Products and Chemi-
cals, Inc., against the defendant, United Gas Pipe Line Com-
pany, under §210 of the Act, in which plaintiff sought to
recover alleged overcharges from the defendant. The Dis-
trict Court had dismissed the action on the ground that “as
private actions for relief under $210 of the Act they were
premature” and because of the “[flailure to join the Cost
of Living Council as an indispensable party. . . .” 503 F.2d
at 1062. The Temporary Emergency Court of Appeals cor -
cluded that it was error to have dismissed the action but
also concluded “that CLC should have been made a party
to the actions below.” 503 F.2d at 1062. The Court accord-
ingly vacated the dismissal orders by the District Court and
—xxvi—
[APPENDIX]
remanded the cases “for appropriate proceedings on the
merits after the United States or appropriate officer or
agency shall have been joined as a party.” 503 F.2d at 1064
(Emphasis added.) This Court accordingly concludes that
it does have jurisdiction under §210 and defendant’s motion
to dismiss for lack of jurisdiction is denied.
Failure to State a Claim Upon Which Relief Can Be
Granted.
Each of the plaintiffs alleges that “[{t]he actions of the
defendant in preventing plaintiff from selling his crude oil
at the current free market price, and forcing plaintiff to
accept a price therefor substantially less than the free mar-
ket price diminished the value of plaintiff’s property, and
constituted a partial taking, by physical appropriation for
public purposes, without just compensation of plaintiff's.
property and property rights in the nortion of the crude
oi! produced from the above lands owned by plaintiff.” They
admit Congress power to delegate authority to make such
regulations and the FEA’s power to regulate prices of crude
oil, but they argue that such price regulation is a partial
taking for which compensation is required by the 5th
amendment. Plaintiffs further argue that they are in no
way attacking the constitutionality or validity of the regu-
lations and that thev are not seeking to enjoin the enforce-
ment of the regulations.
In their brief the plaintiffs state that the major issue
in this case is “{w]hether the federal two-tier crude oil
price control scheme constitutes reasonable regulation, or
whether it amounts to a partial taking of plaintiff's prop-
erty for which compensation must be paid. (Brief of plain-
tiffs, p. 14). They further argue that the two-tier pricing
scheme is “not necessary in the public interest, is not
rationally related to any legitimate regulatory purpose, and
is so arbitrary and discriminatory as to amount to the par-
tial taking of plaintiffs’ property.” (Brief of plaintiffs, p.
~
—xxvii—
[APPENDIX]
49). At oral argument plaintiffs, in response to the court’s
questions, made it unequivocally clear that although they
vigorously assert that the regulations are arbitrary, unrea-
sonable and discriminatory as applied to them, they none-
theless admit the constitutionality, validity and lawfulness
of the regulations. Thus, they argue, they are not seeking
a judgment declaring the regulations to be unlawful and
void. Rather they seek just compensation for the partial
taking of their property by the United States in applying
to their royalty oil ‘nreasonable, arbitrary and discrim-
inatory regulations which force them to accept a price of
$5.20 per barrel while allowing adjoining or nearby royalty
owners to sell their royalty oil at approximately $12.00 per
barrel.
The defendant argues that this Court should grant its
motion to dismiss because recent decisions by the Tem-
porary Emergency Court of Appeals have clearly demon-
strated that plaintiffs’ claims are neither substantial nor
meritorious and hence should be dismissed for failure to
state a claim upon which relief can be granted. In particular
defendant relies on Condor Operating Co. v. Sawhill, 514
F.2d 351 (TECA 1975), cert. denied 421 U.S. 976; Union Oil
Co. v. FEA, __. F.Supp. (C. D. Cal 1974); Exxon Corp.
v. FEO, F.Supp. (D.D.C. 1974); Pasco, Inc. v. FEA,
F.2d (TECA Slip Opinion No. 10-7, Oct. 14, 1975)
and Cities Service Co. v. FEA, F.2d (TECA Slip
Opinion No. DC-34, Dec. 31, 1975). Defendant says Cities
Service is dispositive because the Court specifically stated
“The two-tier pricing system was upheld by this court in a
comprehensive opinion discussing the validity and effects
of the system in Consumers Union v. Sawhill, [512 F.2d
1112, rehearing en banc (TECA 1975) |.” Cities Service slip
cpinion at p. 3. The Court further stated that:
“This court, in Pasco, found that the plaintiffs in that
case had failed to establish that the Entitlements Pro-
gram was arbitrary, capricious, or beyond the agency’s
—xxviii—
[APPENDIX]
authority due to its failure to make a differentiation
within the regulations between refiners producing their
own crude oil and those refiners purchasing their re-
fining needs.” Cities Service, slip opinion, at p. 11.
Finally, on the question of whether there had been a “tak-
ing.” the Court stated:
“Claims for compensation from the government
based upon the Fifth Amendment to the Constitution
require a direct appropriation by the government of
the claimant’s property and do not encompass ‘conse-
quential injuries resulting from the exercise of lawful
power.’ Knox v. Lee, 79 U. S. 457, 551 (1870). In re-
viewing an order of the War Production Board which
required the shut-down of non-essential gold mines
due to the short supply of equipment and resources,
the Supreme Court, in United States v. Central Eureka
Mining Co., 357 U. S. 155, 168 (1958), recognized that
action under a regulation may so diminish the value
of property as to constitute a taking, but stated: ‘/T}he
mere fact that the regulation deprives the property
owner of the most profitable use of his property is not
necessarily enough to establish the owner’s right to
compensation.’ ” Cities Service, slip opinion at p. 15.
The plaintiffs respond to defendant’s argument by saying
that none of these cases are in point because in each case
the plaintiff is attacking the constitutionality, the legality
or validity of the regulations. Here plaintiffs admit the con-
stitutionalitv, legality and validity of the regulations, but
because of what they say is a taking for public use of their
property they are entitled to just compensation. They argue
that this is the first and only case which has been brought
hy anyone seeking the relief which they ask. The defendant
has cited no authority which disputes this contention.
Based on the record before the Court, the Court cannot
conclude that the claims are so totally devoid of merit that
—xxix—
[APPENDIX]
the Court should dismiss the action for failure to state a
claim upon which relief can be granted.
“*A [complaint] may be dismissed on motion if
clearly without any merit; and this want of merit may
consist in an absence of law to support a claim of the
sort made, or of facts sufficient to make a good claim
or in the disclosure of some fact which will necessarily
defeat the claim.’ But a complaint should not be dis-
missed for insufficiency unless it appears to a certainty
that plaintiff is entitled to no relief under any state of
facts which could be proved in support of the claims.”
2A Moore’s Federal Practice Par. 12.08 (Emphasis by
the author. )
The Court of Appeals for the Tenth Circuit has stated:
“The law is clear that a complaint should not be so
dismissed unless it appears to a certainty that plaintiff
is entitled to no relief under any state of facts which
could be proved in support of the claim.” Gas-A-Car,
Inc. v. American Petrofina, Inc., 484 F.2d 1102 at 1107
(10th Cir. 1973).
It is clear that governmental regulation may under
certain circumstances be so unreasonable as to be deemed
a taking which would require compensation. Goldblatt v.
Hemstead, 369 U.S. 590 (1962); U. S. v. Central Eureka
Mining Co., 357 U. S. 155 (1958). The Court cannot there-
fore conclude that the plaintiffs are entitled to no relief
under any state of facts which might be proved in support
of their claim. The motions to dismiss for failure to state a
sufficient claim are denied.
Summary Judgment.
The defendant has submitted the affidavit of John Ver-
non in support of its motion for summary judgment. Said
affidavit was attached to the defendant’s brief in reply to
—xxx—
[APPENDIX]
the plaintiffs’ brief and the plaintiffs have not been re-
quested to further respond to defendant’s brief or affidavit.
Since the Court has determined on the basis of the present
record that summary judgment should not be granted,
there is no need for further response by the plaintiffs at
this time.
The affidavit submitted by the defendant is by John
Vernon, who is the Deputy Assistant Administrator for
Regulatory Programs, Federal Energy Administration. Mr.
Vernon, by his affidavit, gives a brief history of the statu-
tory authority of and the objectives of the Economic Sta-
bilization Program from which came the crude oil price
controls promulgated by the Cost of Living Council (CLC).
Mr. Vernon further states the “Findings and Purpose” of
the Emergency Petroleum Allocation Act from which was
derived the authority of the Federal Energy Office which
continued essentially unchanged the crude oil pricing
scheme orignally promulgated by the CLC. The Federal
Energy Administration received responsibility for adminis-
tering the pricing program on June 27, 1974.
Based on the purpose of the relevant legislation and
the emergencies facing the country, Mr. Vernon concludes
that the two-tier pricing system is in fulfillment of the
cbjectives of Congress and reflects a balance between the
conflicting objectives of a need for increased domestic crude
oil and the need for controlling inflation in prices of crude
oil and refined vetroleum products.
This affidavit is certainly supportive of the defendant’s
position that the two-tier pricing scheme was promulgated
pursuant to lawful authority and that there was a need in
this country for price regulations. It does not, however,
speak to the issue of the discriminatory nature of the
pricing scheme. Nor does the affidavit give detailed infor-
mation regarding the steps taken or investigation done by
the CLC, FEO or FEA in promulgating the regulations in
question.
—xxxi—
[APPENDIX]
Whether there has been a “taking” typically involves a
question of fact. The Supreme Court of the United States
has stated it this way:
“Traditionally, we have treated the issue as
to whether a particular governmental restriction
amounted to a constitutional taking as being a ques-
tion properly turning upon the particular circum-
stances of each case.” U. S. v. Central Eureka Mining
Co., 357 U. S. 155 at 168 (1958). See also Goldblatt
v. Hempstead, 369 U. S. 590 (1962).
Since the precise facts are not known it is impossible to
determine at this time that there are no genuine issues as
to any material fact as required by Rule 56(c) Federal
Rules of Civil Procedure. The motion for summary judg-
ment is denied.
CERTIFICATION TO TEMPORARY
EMERGENCY COURT OF APPEALS
The first paragraph in each plaintiff’s complaint states:
“1. This is an action against the United States,
founded upon the 5th Amendment to the United States
Constitution, to receive just compensation for property
taken by the United States for public purposes by
physical appropriation, for which no compensation has
been paid.”
12 U.S.C. $1904 (note §$211(c) states:
“(c) In any action commenced under this title in
any district court of the United States in which the
court determines that a substantial constitutional issue
exists, the court shall certify such issue to the Tem-
porary Emergency Court of Appeals. Upon such certi-
fication, the Temporary Emergency Court of Appeals
shall determine the appropriate manner of disposition
—xxxii—
[APPENDIX]
which may include a determination that the entire
action be sent to it for consideration or it may, on the
issues certified, give binding instructions and remand
the action to the certifying court for further disposi-
tion.”
There is no question but that these actions are “com-
menced under this title.” The plaintiffs specifically invoke
jurisdiction under section 210. Neither is there any question
but that plaintiffs are asserting entitlement to just com-
pensation in each of these three cases because of the imposi-
tion upon them of the two-tier crude oil pricing structure.
If they are entitled to just compensation it is by their own
theory, based upon the Fifth Amendment. The Fifth
Amendment provides in part:
“No person shail... ; nor shall private property be
taken for public use, without just compensation.”
There is, therefore, in this Court’s judgment, no question
but that “a substantial constitutional issue exists” and the
Court so finds. Certification is accordingly required by stat-
ute as to the constitutional issue involved. “Where substan-
tial constitutional issues are raised it is for the Temporary
Emergency Court of Appeals to determine the appropriate
disposition. .. .” National Petroleum Refiners Association V.
Dunlop, 486 F.2d 1388 at 1392 note 11 (TECA 1972).
Rule 31 of the Temporary Emergency Court of Appeals
provides:
“(9) When a district court certifies to this court a
question involving a substantial constitutional issue,
the certificate shall contain a statement of the nature
of the cause and of the facts on which such issue arises.
The certificate shall constitute (be in lieu of) a notice
of appeal.
“(b) When a constitutional issue is certified by a
district court the clerk will upon receipt thereof from
—xxxili—
[APPENDIX]
the district court notify the plaintiff in the district
court, who shall promptly pay the docket fee, after
which the case will be placed on the docket. If the
plaintiff fails to pay the fee within 7 days, unless ex-
empt or relieved from its payment, the proceeding will
be dismissed.
“(c) After docketing, the certificate shali be sub-
mitted to the Chief Judge for disposition pursuant to
Rule 24 and §211(c) of P. L. 92-210 for a preliminary
examination to determine whether the certificate will
be dismissed, or whether other disposition shall be
made.”
This Court has heretofore in this order set forth “a state-
ment of the nature of the cause and of the facts on which
such issue arises.” The constitutional issue certified to the
Temporary Emergency Court of Appeals is as follows:
“HAVE ROYALTY OWNERS, WHOSE CRUDE OIL
IS SUBJECT TO THE CEILING PRICE AS DETER-
MINED UNDER THE REGULATIONS (10 C.F.R.
§212.72-212.74) AND WHO MAY NOT SELL THEIR
CRUDE OIL AT A PRICE IN EXCESS OF THE CEIL-
ING PRICE HAD THEIR PROPERTY TAKEN FOR
PUBLIC USE FOR WHICH THEY MAY RECOVER
JUST COMPENSATION FROM THE UNITED
STATES PURSUANT TO THE FIFTH AMEND-
MENT OF THE CONSTITUTION OF THE UNITED
STATES?”
IT IS SO ORDERED this 10th day of February, 1976.
s/ Joseph W. Morris
United States District Judge
(a)
(b)
(c)
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APPENDIX III
PERTINENT CONSTITUTIONAL AND
STATUTORY PROVISIONS
United States Constitution, Amendment V.
“... nor shall private property be taken for public
use, without just compensation.”
28 U.S.C. $1346 (a).
“The district courts shall have original jurisdiction,
concurrent with the Court of Claims, of:
* * * * * *
(2) Any other civil action or claim against the
United States, not exceeding $10,000 in amount,
founded either upon the Constitution, or any Act of
Congress, or any regulation of an executive depart-
ment, or upon any express or implied contract with
the United States, or for liquidated or unliquidated
damages in cases not sounding in tort. . .”
Economic Stabilization Act of 1970, Amendments of
1971, 12 U.S.C.A. 1904 note, P.L. 92-210, 85 Stat. 743:
“< 210. Suits for damages or other relief
“(a) Any person suffering legal wrong because of
anv act or practice arising out of this title, or any order
or regulation issued pursuant thereto, may bring an
action in a district court of the United States, without
regard to the amount in controversy, for appropriate
relief, including an action for a declaratory judgment,
writ of injunction (subject to the limitations in section
211), and/or damages.
“(b) In any action brought under subsection (a)
against any person renting property or selling goods
or services who is found to have overcharged the plain-
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[APPENDIX]
tiff, the court may, in its discretion, award the plaintiff
reasonable attorney’s fees and costs, plus whichever of
the following sums is greater:
“(1) an amount not more than three times the
amount of the overcharge upon which the action
is based, or
“(2) not less than $100 or more than $1,000;
except that in any case where the defendant establishes
that the overcharge was not intentional and resulted
from a bona fide error notwithstanding the main-
tenance of procedures reasonably adapted to the avoid-
ance of such error the liability of the defendant shall
be limited to the amcunt of the overcharge: Provided,
That where the overcharge is not willful within the
meaning of section 208(a) of this title, no action for
an overcharge may be brought by or on behalf of any
person unless such person has first presented to the
seller or renter a bona fide claim for refund of the
overcharge and has not received repayment of such
overcharge within ninety days from the date of the
presentation of such claim.
“(c) For the purposes of this section, the term ‘over-
charge’ means the amount by which the consideration
for the rental of property or the sale of goods or serv-
ices exceeds the applicable ceiling under regulations
or orders issued under this title.
“$ 211. Judicial review.
“(a) The district courts of the United States shall
have exclusive original jurisdiction of cases or contro-
versies arising under this title, or under regulations or
orders issued thereunder, notwithstanding the amount
in controversy; except that nothing in this subsection
or in subsection (h) of this section affects the power
of any court of competent jurisdiction to consider, hear,
and determine any issue by way of defense (other than
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[APPENDIX]
a defense based on the constitutionality of this title or
the validity of action taker by any agency under this
title) raised in any proceeding before such court. If in
any such proceeding an issue by way of defense is
raised based on the constitutionality of this title or the
validity of agency action under this title, the case shall
be subject to removal by either party to a district court
of the United States in accordance with the applicable
provisions of chapter 89 of title 28, United States Code.
“(b)(1) There is hereby created a court of the
United States to be known as the Temporary Emer-
gency Court of Appeais, which shall consist of three
or more judges to be designated by the Chief Justice
of the United States from judges of the United States
district courts and circuit courts of appeals. The Chief
Justice of the United States shall designate one of such
judges as chief judge of the Temporary Emergency
Court of Appeals. and may, from time to time, desig-
nate additiona! judges for such court and revoke pre-
vious designations. The chief judge may, from time to
time, divide the court into divisions of three or more
members, and any such division may render judgment
as the judgment of the court. Except as provided in
subsection (d)(2) of this section, the court shall not
have power to issue any interlocutory decree staying
or restraining in whole or in part any provision of this
title, or the effectiveness of any regulation or order
issued thereunder. In all other respects, the court shall
have the powers of a cirewit court of appeals with
respect to the jurisdiction conferred on it by this title.
The court shall exercise its powers and prescribe rules
governing its procedure in such manner as to expedite
the determination of cases over which it has jurisdic-
tion under this title. The court shall have a seal, hold
sessions at such places as it may specify, and appoint
a clerk and such other employees as it deems necessary
or proper.
ne A
—Xxxvii—
[APPENDIX)
“(2) Except as otherwise provided in this section,
the Temporary Emergency Court of Appeals shall have
exclusive jurisdiction of all appeals from the district
courts of the United States in cases and controversies
arising under this title or under regulations or orders
issued thereunder. Such appeals shall be taken by the
filing of a notice of appeal with the Temporary Emer-
gency Court of Appeals within thirty days of the entry
of judgment by the district court.
“(c) In any action commenced under this title in any
district court of the United States in which the court
determines that a substantial constitutional issue exists,
the court shall certify such issue to the Temporary
Emergency Court of Appeals. Upon such certification,
the Temporary Emergency Court of Appeals shall de-
termine the appropriate manner of disposition which
may include a determination that the entire action be
sent to it for consideration or it may, on the issues
certified, give binding instructions and remand the
action to the certifying court for further disposition.
“(d)(1) Subject to paragraph (2), no regulation of
any agency exercising authority under this title shall
be enjoined or set aside, in whole or in part, unless a
final judgment determines that the issuance of such
regulation was in excess of the agency’s authority, was
arbitrary or capricious, or was otherwise unlawful
under the criteria set forth in section 706(2) of title 5,
United States Code, and no order of such agency shall
be enjoined or set aside, in whole or in part, unless a
final judgment determines that such order is in excess
of the agency’s authority, or is based upon findings
which are not supported by substantial evidence.
“(2) A district court of the United States or the
Temporary Emergency Court of Appeals may enjoin
temporarily or permanently the application of a par-
ticular regulation or order issued under this title to a
—XxXxXxVviii—
[APPENDIX]
person who is a party to litigation before it. Appeals
from interlocutory decisions by a district court of the
United States under this paragraph may be taken in
accordance with the provisions of section 1292(b) of
title 28, United States Code; except that reference in
such section to the courts of appeals shall be deemed
to refer to the Temporary Emergency Court of Appeals.
“(e)(1) Except as provided in subsection (d) of this
section, no interlocutory or permanent injunction re-
straining the enforcement, operation, or execution of
this title, or any regulation or order issued thereunder,
shail be granted by any district court of the United
States or judge thereof. Any such court shal! have
jurisdiction to declare (A) that a regulation of an
agency exercising authority under this title is in excess
of the agency’s authority, is arbitrary or capricious,
or is otherwise unlawful under the criteria set forth
in section 706(2) of title 5, United States Code, or
(B) that an order of such agency is invalid upon
a determination that the order is in excess of the
agency's authoritv, or is based upon findings which
are not supported by substantial evidence.
“(2) Any party aggrieved by a declaration of a dis-
trict court of the United States respecting the validity
of any regulation or order issued under this title may,
within thirty davs after the entry of such declaration,
file a notice of appeal therefrom in the Temporary
Emergency Court of Appeals. In addition, any party
believing himself entitled by reason of such declara-
tion to a permanent injunction restraining the enforce-
ment, operation, or execution of such regulation or
order may file, within the same thirty-day period, a
motion in the Temporary Emergency Court of Appeals
requesting such injunctive relief. Following considera-
tion of such appeal or motion, the Temporary Emer-
gency Court of Appeals shall enter a final judgment
—xXxxix—
[APPENDIX]
affirming, reversing, or modifying the determination
of the district court and granting such permanent
injunctive relief, if any, as it deems appropriate.
“(f) The effectiveness of a final judgment of the
Temporary Emergency Court of Appeals enjoining or
setting aside in whole or in part any provision of this
title, or any regulation or order issued thereunder,
shall be postponed until the expiration of thirty days
from the entry thereof, except that if a petition for a
writ of certiorari is filed with the Supreme Court under
subsection (g) within such thirty days, the effective-
ness of such judgment shall be postponed until an
order of the Supreme Court denying such petition
becomes final, or until other final disposition of the
action by the Supreme Court.
“(g) Within thirty days after entry of any judgment
or order by the Temporary Emergency Court of Ap-
peals, a petition for a writ of certiorari may be filed
in the Supreme Court of the United States, and there-
upon the judgment or order shall be subject to review
by the Supreme Court in the same manner as a judg-
ment of a United States court of appeals as provided
in section 1254 of title 28, United States Code. The
Temporary Emergency Court of Appeals, and the Su-
preme Court upon review of judgments and orders of
the Temporary Emergency Court of Appeals, shall
have exclusive jurisdiction to determine the constitu-
tional validity of any provision of this title or of any
regulation or order issued under this title. Except as
provided in this section, no court, Federal or State,
shall have jurisdiction or power to consider the con-
stitutional validity of any provision of this title or of
any such regu'ation or order, or to stay, restrain,
enjoin, or set aside, in whole or in part, any provision
of this title authorizing the issuance of such regulations
or orders, or any provision of any such regulation or
= —_—
[APPENDIX]
order, or to restrain or enjoin the enforcement of any
such provision.
“(h) The provisions of this section apply to any
actions or suits pending in any court, Federal or State,
on the date of enactment of this section in which no
final order or judgment has been rendered. Any af-
fected party secking relief shal] be required to follow
the procedures of this title.”
CERTIFICATE OF MAILING
I hereby certify that three copies of the foregoing
Petition for Writ of Certiorari were this date mailed,
postage prepaid, to:
Robert H. Bork
Solicitor General
Department of Justice
Washington, D.C. 20530
I further certify that the following who are all of the
counsel for the United States, required by law to be served
in the above case, were this day jointly mailed three copies
of the foregoing Petition for Writ of Certiorari, postage
prepaid:
Rex E. Lee
Assistant Attorney General
Department of Justice
Washington, D.C. 20530
Linda Pence
Economic Litigation Section
Civil Division, Department of Justice
Washington, D.C. 20530
Michael Rose
Economic Litigation Section
Civil Division, Department of Justice
Washington, D.C. 20530
DATED this . day of July, 1976.
‘Charles Nesbitt =”
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.